Last week, I analyzed the reader’s holdings performance when the markets tumbled in 2000. The goal was to see if funds went from equity funds into bond funds during the 2000 correction.
Today, let’s view the performance of five holdings from a follower during the 2007-2009 sell off. Here’s the name of the funds and type: AGTHX (equity fund), ANWPX (equity fund), CAIBX (blend: equity and bond fund), CWBFX (bond fund) and AIBAX (bond fund).
Three holdings (CAIBX, AGTHX, and ANWPX), blend and equity funds, sold off dramatically. More importantly, two holdings (CWBFX and AIBAX) lost tremendous value, but outperformed the market. Plus, one bond fund, AIBAX had a positive return during this timeframe.
The following answers our question if money went from equity into bond funds during a large pullback. The answer is yes — at least with these bond funds.
So, here are action points to think about:
First, these results in no way represent all equity or bond fund results during selloffs.
Second, not all bond funds guarantee profitability during downturns.
Third, not all equity funds guarantee outperformance of the market during downturns.
Fourth, are your holdings diversified?
Fifth, if not, why?
Wall Street makes its money with us being in the market. We make our money with what we own and when.
Next week, we will examine previous market tops to see if we can pick up clues before a downfall.
Plan your work, work your plan, and share your harvest!